topic Re: Question About Utilization in Understanding FICO® Scoring

Question About Utilization

EaglesFan2006 — Mon, 14 May 2012 00:49:17 GMT

If you pay off your card balances, how long does it normally take for your score to reflect the low utilization on a report? I always get confused when I see the high balance listed and was wondering if that impacts your credit, even if the current balance is zero.

Re: Question About Utilization

DaveSignal — Mon, 14 May 2012 01:08:58 GMT

Your score will reflect the utilization as soon as it is in your credit report. It will be in the credit report a day or two after your creditor(s) do monthly updates, usually at the time of your statement date.

Re: Question About Utilization

llecs — Mon, 14 May 2012 02:13:56 GMT

To add, high balance doesn't mean anything for most all of your CCs. For the version of TU FICO on this website, high balance comes into play for certain charge cards.

Re: Question About Utilization

Revelate — Mon, 14 May 2012 02:40:53 GMT

@llecs wrote:
To add, high balance doesn't mean anything for most all of your CCs. For the version of TU FICO on this website, high balance comes into play for certain charge cards.

+1.

I can't conclusively state it's not part of the FICO algorithm (it is after all reported to us as consumers and not all data is which makes it suspect for inclusion); however, it's almost certainly used for underwriting. There's a lot ot be said for having a high balance and then getting it repaid... demonstrated responsible use of credit.

For CC's, older style CC's and some current Visa Signature (and World MC cards I think too) don't report a specific limit, in which case your high balance is used as your CL as far as FICO calculations are concerned for utilization. Unfortunately that just adds to the confusion... fortunately it's not as common anymore and more and more lenders are now reporting limits across all cards.